Latest news with #Motiwala
Express Tribune
a day ago
- Business
- Express Tribune
'Gas price hike will hit exports'
Listen to article Chairman Businessmen Group (BMG) Zubair Motiwala and Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani have strongly opposed the proposed gas tariff hike for industrial processes, calling it illogical and damaging for Pakistan's already struggling industrial sector. The proposal is expected to be discussed in the upcoming meeting of the Economic Coordination Committee (ECC). In a joint statement, Motiwala and Bilwani said the hike is unjustified in light of current global and domestic energy trends. They noted that Brent crude prices have declined and that the SNGPL system is already facing a surplus of imported RLNG, with 300 to 400mmcfd going unutilised due to high prices and excessive taxes. They argued that the government should focus on improving supply management instead of further burdening industry. They emphasised that although only 80 to 100 Independent Power Producers (IPPs) use process gas, more than 8,000 Small and Medium Enterprises (SMEs) rely on it. A tariff increase would cripple these SMEs, which form the backbone of Pakistan's manufacturing sector. Instead, they recommended a 20% reduction in gas tariffs to help SMEs stay afloat amid rising input costs and harsh budgetary taxes. The leaders highlighted that OGRA's recent decision on May 20, 2025, reduced SSGC's gas tariff by Rs103.95 per MMBtu to Rs1,658.56, reflecting falling global fuel prices. They questioned how a hike for industrial users could be justified when regulatory bodies themselves recognised falling costs. OGRA also set a revised tariff of Rs1,895.25 per MMBtu for SNGPL, which remains below the proposed rate. Petitioners during OGRA's hearings also flagged inflated RLNG diversion costs and unrealistic Brent crude pricing assumptions that distort true gas pricing. Motiwala and Bilwani warned that raising gas tariffs would worsen inflation, increase unemployment, and discourage local and foreign investment. Industry, already hit by electricity costs, currency instability, and shrinking demand, cannot absorb further shocks. They called on the ECC to immediately withdraw the proposal and conduct a transparent review of gas pricing, aligning it with OGRA's findings and global trends. "Burdening industry to offset inefficiencies elsewhere is unacceptable," they said. "Support for industry is essential for true economic recovery."
Business Recorder
a day ago
- Business
- Business Recorder
Ministries oppose gas price increase
ISLAMABAD: The gas price increase has been opposed in its current form by several line ministries, citing concerns that it will disproportionately impact the industrial sector, lead to higher electricity prices, and result in cross-subsidization of the fertiliser industry at the expense of other industries. The concerns raised by ministries representing various sectors have also been made part of the summary which came under consideration of the Economic Coordination Committee (ECC) of the Cabinet. The Power Division stated that the proposed hike in gas rates for the power sector—from Rs 1,050/mmBtu to Rs 1,313/mmBtu—will increase electricity generation costs for thermal plants using domestic gas by approximately Rs 10 billion in FY 2025–26. This increase is expected to result in higher Fuel Cost Adjustments (FCA), ultimately passed on to consumers, raising electricity tariffs by around Rs 0.10 per unit. Pakistan now gas-surplus amid demand collapse, says Motiwala The Power Division further noted that rising generation costs could make electricity less affordable for all consumer categories. This may reduce the overall sales of Discos, with a knock-on effect on capacity payments in the power sector. Additionally, the price hike would reduce the merit order ranking of gas-based power plants, pushing them below imported fuel plants such as those using coal. This shift could result in an estimated foreign exchange exposure of around $140 million due to increased coal imports. The Division cautioned that such a change in the energy mix must be carefully considered due to its implications for energy affordability, the balance of payments, and broader macroeconomic stability. In a scenario where imported fuel-based plants replace gas plants, the Sui gas companies could face estimated revenue losses of Rs 39 billion, depending on global fuel price trends. The Power Division also addressed a reported Rs 41 billion revenue shortfall claimed by SNGPL, attributed to RLNG diversion. However, it emphasized that the cost of RLNG diversion is already covered under Gas Supply Agreements (GSAs) with government power plants and reimbursed through CPPA-G via NPD payments. Therefore, it recommended that only genuinely unrecovered amounts, if any, be allowed in SNGPL's accounts. The Ministry of Industries and Production (MoI&P) expressed concern that increasing gas prices for the general industry—from Rs 2,150 to Rs 2,350/mmBtu—will escalate the cost of doing business, hinder industrial growth, and damage export competitiveness. The Ministry warned this would further disadvantage Pakistani industries compared to regional competitors. MoI&P highlighted that the new National Tariff Policy 2025–30 aims to reduce Customs duties on finished goods and decrease input costs for locally manufactured products. These objectives would be undermined if the cost of industrial inputs like gas continues to rise. The Ministry recommended that the Petroleum Division reconsider its decision and refrain from increasing gas prices for the general industry. The Finance Ministry also raised objections, noting that while gas prices for the fertiliser sector have been kept unchanged, the process industry will face a Rs 200/mmBtu increase. It argued this effectively results in the process industry cross-subsidising the fertiliser sector. The Petroleum Division was urged to consider full cost recovery from the fertiliser sector to alleviate the subsidy burden on the rest of the industry. Furthermore, the Finance Ministry criticized the current practice of recovering Unaccounted-for Gas (UFG) losses through consumer pricing, which it said discourages utilities from improving operational efficiency. It recommended that the Petroleum Division brief the ECC on planned UFG reduction measures and their financial implications. The ministry also requested the Petroleum Division to inform the ECC whether lifting the moratorium on new gas connections could help address surplus RLNG issues and the curtailment of indigenous gas production. Copyright Business Recorder, 2025
Express Tribune
10-06-2025
- Business
- Express Tribune
Businessmen air concern over budget measures
Listen to article Reacting to the federal budget for fiscal year 2025-26, business leaders and industrialists raised concerns, citing increased burden on taxpayers and the lack of incentives for economic growth. Businessmen Group (BMG) Chairman Zubair Motiwala, while calling it a "camouflage budget," expressed serious reservations about its unrealistic targets and the absence of any meaningful relief for the business community or the common man. The budget includes various announcements related to digitalisation and promoting the cashless economy. These measures alone are insufficient for stimulating exports or driving industrialisation, which are critical for sustainable economic growth, he stated. Addressing a press conference at the Karachi Chamber of Commerce and Industry (KCCI) after the finance minister's budget speech on Tuesday, he criticised the government for setting overly ambitious goals despite the country's poor economic performance in the previous fiscal year, during which all major targets, including GDP growth and fiscal consolidation, were missed. Motiwala questioned the rationale behind increasing targets without providing any practical explanation regarding how these would be achieved, especially in a fragile economic environment dominated by uncertainty, high inflation and the IMF-imposed constraints. He remarked that for achieving the elevated tax collection target, the government seems to be relying largely on extracting more revenue from the existing pool of compliant taxpayers, rather than expanding the tax base. He feared that instead of introducing meaningful reforms to bring untaxed sectors into the fold, the budget would result in increased discretionary powers for tax officials, burdening documented businesses and discouraging the economic activity. "This strategy of squeezing the formal sector could result in contraction of economic output rather than expanding it." The Overseas Investors Chamber of Commerce and Industry (OICCI) has expressed disappointment over the government's limited progress in addressing inequitable corporate tax rates in the recent budget. While a marginal reduction in super tax was acknowledged, the OICCI reiterated the need for a comprehensive overhaul of tax structures to enhance Pakistan's competitiveness and attract foreign investment. The chamber noted the absence of a meaningful reduction in government expenditure, which could have helped narrow the budget deficit. Fiscal discipline remains critical to ensuring macroeconomic stability. The OICCI urged the government to prioritise expenditure rationalisation in its budgetary measures. It regretted the missed opportunity to broaden the tax base, particularly the absence of a concrete strategy to document Pakistan's Rs9 trillion cash-based informal economy – a critical measure for meaningful revenue enhancement and economic formalisation that the chamber had consistently advocated for. Federal B Area Association of Trade and Industry President Shaikh Muhammad Tehseen commented that the federal government's announcement of the initiative to promote SMEs is a welcome move for owners of small and medium-sized businesses. He urged the government to engage relevant stakeholders and incorporate their recommendations to ensure the success of the proposed business scheme, support the export-based sector and generate jobs for the youth. According to the budget speech, on the directives of the PM, the Small and Medium Enterprises Development Authority (Smeda) has prepared a three-year business plan for 2024-27, which includes increasing SME financing, enhancing exports, building inter-industry linkages and promoting female inclusion in business. The speech also mentioned the success of the SME Risk Coverage Scheme, which generated more than Rs311 billion in assistance for over 95,000 SMEs by May 2025. The government's target is to increase SME financing to Rs1,100 billion by 2028. "The government should focus on reducing the cost of production to ensure benefits for industries, particularly through lower interest rates, utility charges and petroleum product prices, which will support the struggling SME units and attract both local and foreign investors to establish SMEs," Tehseen said. SITE Association of Industry (SAI) President Ahmed Azeem Alvi stressed the need for clearer policies, faster tax refunds and digital reforms to support exporters and industries. He said the government has recognised the need for relief within the Customs sector and intends to implement reforms. However, he noted that the full impact of these measures will only be clear once detailed budget documents are released.
Business Recorder
10-06-2025
- Business
- Business Recorder
KCCI sounds alarm on ‘camouflage' Budget 2025-26
Chairman Businessmen Group (BMG), Zubair Motiwala, while terming the federal budget 2025-26 a 'camouflage budget,' expressed serious reservations over its unrealistic targets and the absence of any meaningful relief for the business community or the common man. According to a press statement, he noted that while the budget includes various announcements related to digitalisation and promoting a cashless economy, these measures alone are insufficient to stimulate exports or drive industrialisation, which are critical for sustainable economic growth. Finance Minister Muhammad Aurangzeb announced Pakistan's federal budget 2025-26 'for a competitive economy' on Tuesday, targeting a modest 4.2% growth for the coming fiscal year, compared to 2.7% expected in the outgoing FY25. Addressing a press conference at the Karachi Chamber of Commerce and Industry (KCCI), Chairman BMG criticised the government for setting 'overly ambitious goals' despite the country's poor economic performance in the previous fiscal year, during which all major targets, including GDP growth and fiscal consolidation, were missed. He questioned the rationale behind increasing the targets without providing any practical explanation of how these would be achieved, especially in a fragile economic environment dominated by uncertainty, high inflation, and IMF-imposed constraints. Missed Opportunity: OICCI slams Budget FY26 for ignoring informal economy Motiwala was joined at the press conference by Vice Chairman BMG Anjum Nisar, President KCCI Muhammad Jawed Bilwani, Senior Vice President Zia ul Arfeen, Chairman Policy Research & Advisory Council Younus Dagha, former presidents Junaid Esmail Makda, Muhammad Idrees, Iftikhar Ahmed Sheikh, and members of the KCCI Managing Committee. Chairman BMG pointed out that the government's approach to achieving the elevated tax collection target seems to rely largely on extracting more revenue from the existing pool of compliant taxpayers rather than expanding the tax base. Motiwala feared that instead of introducing meaningful reforms to bring untaxed sectors into the fold, the budget would result in increased discretionary powers for tax officials, further burdening documented businesses and discouraging economic activity. He warned that this strategy of squeezing the formal sector could result in shrinking economic output rather than expanding it. Chairman BMG lamented the lack of any significant policy direction aimed at boosting exports or industrialisation. He said the government appears to be moving towards an import-dependent model, ignoring the need to reduce the cost of doing business, especially in energy-intensive sectors like textiles. 'No announcement was made to address the high cost of gas, which continues to make Pakistani products uncompetitive in international markets. He emphasised that without reducing gas tariffs or easing the interest rate environment, the government's growth targets will remain unattainable,' said Motiwala. He criticised the negligible support provided to the export-oriented textile sector, which he noted is the backbone of the country's economy. A meaningful reduction in gas prices, particularly for industrial users, could have yielded positive results, but unfortunately, it was not announced. The allocation of only Rs1,000 billion for the Public Sector Development Program (PSDP) was also called out as woefully inadequate, particularly in light of the deteriorating state of infrastructure. While acknowledging that the budget was presented under strict IMF conditions, he said that despite being technically compliant, it fails to address the pressing needs of Pakistan's industrial sector or its citizens. Motiwala described the budget as one that may satisfy external lenders but does not offer any practical hope for businesses or the wider population. Meanwhile, President KCCI Muhammad Jawed Bilwani rejected the budget, stating it completely fails to offer any meaningful relief to the industrial sector or the general public. He said the government's claim of reduced inflation does not align with the realities faced by households, where electricity bills remain unaffordable and basic necessities are out of reach. Bilwani decried the lack of measures to reduce electricity tariffs and interest rates, which are key drivers of the high cost of doing business. Moreover, Bilwani expressed concern over the government's over-reliance on remittances and IMF programs to manage the economy, 'calling it an unsustainable and short-sighted approach'. He also criticised the minimal allocation for long-delayed infrastructure projects like K-IV, terming it a sign of the government's disregard for Karachi's needs and its vital contribution to the national economy. He added that despite repeated demands from the business community, no concrete steps have been taken to broaden the tax net or introduce structural economic reforms, which remain essential for long-term economic stability.
Express Tribune
08-05-2025
- Business
- Express Tribune
Business community condemns Indian aggression
The business and industrial community of Karachi has expressed complete solidarity and unwavering support for the government and armed forces of Pakistan following the recent unprovoked and cowardly missile strikes by India targeting civilian areas in Pakistani territory. The Karachi Chamber of Commerce and Industry (KCCI) and various industrial town associations strongly condemned the blatant act of aggression, which resulted in the loss of innocent civilian lives and damage to public infrastructure. Chairman Business Management Group (BMG) Zubair Motiwala said that Pakistan is a peace-loving country, but will defend itself with full force when its sovereignty and citizens are attacked. He declared unwavering support for the armed forces, saluting their professionalism and courage. Motiwala called upon the business community to set aside differences and stand together for national defence. President KCCI Muhammad Jawed Bilwani appealed to the international community to take immediate action to de-escalate tensions and hold India accountable for targeting civilians. He emphasised that Pakistan's armed forces have shown strategic restraint but will respond decisively to aggression. Bilwani praised the sacrifices of martyrs and the resilience of soldiers, saying that every attack unites Pakistanis further. The business community declared unshakable loyalty to Pakistan's sovereignty, support for the government's policies, and absolute trust in the armed forces' preparedness and professionalism. They rejected Indian aggression and pledged to contribute resources and influence to support national preparedness.
